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A conversation with Cyrus Yari and Iman Olya, co-hosts of the Rational VC podcast

Patrick Ryan
Jan 16, 2022
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Hi folks, Paddy here from Odin. We are making it 10x cheaper and easier to launch & invest in syndicates and venture funds. We are now live in private beta.

Want to set up an SPV? Learn more here, or click below to get started. ⬇️

Launch an SPV with Odin


Good Afternoon,

I hope you had a good week, and you’re back in the groove at work.

Today, a podcast with our friends Cyrus and Iman, as well as the usual selection of funny and interesting stuff I’ve read online recently.


Podcast

The Rational VC boys kindly hosted Mary and I at their studio in December.

We had a great time recording this conversation. We chat about our upbringing, what we’re working on and other topics like staying healthy, community, nation state building, memes, European VC vs. US VC, porn & sex-positive culture, our favourite books and more.

“Always just be doing sh*t” is Cyrus and Iman’s motto. I think it’s a great one.

You can listen on Spotify or YouTube:


Best of the Internet

Capital is Not a Strategy

An excellent short piece from Bill Janeway on the dangers of the current bubble in venture capital.

Occasionally, these explosions of investor exuberance have funded the deployment of innovative technologies at sufficient scale to transform the market economy, as was the case with railroads, electrification, and the internet. Whether a bubble is productive depends on what it leaves behind. But all bubbles burst, so even investors in the vehicles of a productive episode inevitably will fall into one of two categories: the quick or the dead.

It will be interesting to see how things play out as the central banks tighten their belts in the coming years. A lot of experienced tech investors have said this bubble makes 2000 look small.

This is something I think about a lot. We help smaller cheque investors access venture deals. The challenge is how to do so ethically and in the best interests of these people.

My personal strategy remains the same - invest very early and very broadly, attempting to index top quartile. I wrote about this here. This has worked well for the likes of Y Combinator, Seedcamp, Kima Ventures and many more over long periods of time. You’re probably ever so slightly less likely to eg. 30x your overall portfolio, but you’re also much less likely to be left holding the bags.

Your chance of 3-xing your money increases about 150% with this strategy, and your chance of losing money falls from 40% plus to basically 0 once you hit sufficient volume.

Here’s some modelling from Steve Crossan (Firstminute Capital, Deep Mind) that supports this thesis:

Modelling suggests rational venture investors should have bigger portfolios  | by Steve Crossan | Unreasonable Effectiveness | Medium

In terms of sectors, I go for things I can understand, or SPV’s led by people who understand those things. I’m interested in fintech, SaaS, energy & climate tech and biotech. If you’re building or investing in one of those spaces, get in touch. I would love to chat.

By the People, for the People

Kilian from Papercup put me on to a great piece (written two years ago) by Harvey Multani on setting up an SPV to invest in the company you work at. Thank you Kilian for sharing.

This is a smart way for employees to increase their equity stake in a business they believe in, and it provides access to folks who would not otherwise get into the deal. If you’re an employee at a high-growth startup, drop me a line. We can help you do this (and it’s way easier than doing it with AngelList).

Harvey Multani
The Employee's Guide to Employee Led SPVs
Target Audience Employees of US based venture capital backed companies who want more equity upside. If your company is not based in the US, see this guide Investors: see Investor’s Guide CEOs: see CEO’s Guide Board members: see Board Member’s Guide Everyone: see the…
Read more
3 years ago · 10 likes · Harvey Multani

YC’s New Deal

The news that Y Combinator will now be investing an additional $375k in portfolio companies has ruffled some feathers. The investment, which is in addition to the standard $125k YC offers for a 7% stake, will convert into equity on “most favourable nation” terms - i.e. the best terms offered by an investor in the next round.

This effectively means clearing out a lot of the space available to angels and seed funds to invest in YC companies post demo day.

It surely makes sense for YC as a business, improving the upside they generate from their portfolio. However, it’s going to piss off a lot of their loyal investor network. Venture capital is a tricky world of frenemies when it comes to competitive rounds.

Twitter avatar for @pitdesi
Sheel Mohnot @pitdesi
YC has a new deal that is $125k for 7% and an additional $375k on an uncapped note w/ MFN. Good move for them but makes YC incompatible with seed-stage VC's that lead rounds... hard for us to get our ownership with that add'l $375k from YC.
blog.ycombinator.comYC’s $500,000 Standard DealWe’re excited to announce our new standard deal at Y Combinator. When a company is accepted into YC, we now invest a total of $500,000.
6:15 PM ∙ Jan 10, 2022
509Likes77Retweets

It’s a Work Event

In case you missed it, UK prime minister Boris Johnson and the rest of the Conservatives have been in trouble. They broke their own rules and threw a party in Downing Street during lockdown in summer 2020. Boris’ excuse - it was a “work event”.

The media has been calling for Johnson to step down. On Friday, members of the British public also decided to voice their concerns:

Twitter avatar for @RobbieKnox
Robbie Knox @RobbieKnox
100 Boris Johnsons having a party outside Downing Street.
1:09 PM ∙ Jan 14, 2022
64,158Likes9,576Retweets
Twitter avatar for @TheDuke1
The Duke @TheDuke1
@RobbieKnox These people need to get jobs
2:16 PM ∙ Jan 14, 2022
167Likes6Retweets
Twitter avatar for @JasonJ1987
Jason @JasonJ1987
@TheDuke1 @RobbieKnox It’s a work event
2:20 PM ∙ Jan 14, 2022
9,294Likes178Retweets

New Phone Who Dis

The Portland Pickles should definitely just leave this guy to run their twitter.

Twitter avatar for @ThreeTwoEephus
Levi Weaver, idk @ThreeTwoEephus
I have not laughed this hard before 8am ever, not even once in my life
Image
Image
Image
1:54 PM ∙ Jan 13, 2022
139,247Likes21,123Retweets

That’s all for this week

Coming soon, we’ve got new podcast episodes and some more long-form pieces and deep dives.

If you’d like to speak to us about setting up an SPV, get in touch via the links below.

Cheers,

Paddy

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If you’d like to apply to join our private community, through which you can meet other Odin members, get early access to syndicate investment opportunities and attend community events, please share some more information with us.

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